Michigan Infrastructure Transportation Association > Reference Materials

1/27/2012

For more than a decade, governors and legislators from both parties have looked the other way as Michigan's highways and roads deteriorated to dangerous extremes.

On state roads alone, Michigan falls more than $300 million short of what's needed to maintain them. A nonpartisan report released in 2008 concluded that Michigan would have to double its transportation funding to keep its roads and transit systems in good shape.

Give Gov. Rick Snyder some credit, then, for at least acknowledging the problem and moving the transportation agenda forward. Now, with the number of Michigan roads in substandard condition expected to double by 2015, he and forward-thinking lawmakers in both parties need to put the pedal to the metal, supporting bills that would collect an extra $1.4 billion annually to fix crumbling roads and bridges.

A bipartisan package of nearly 20 bills scheduled to be introduced in the House today calls for reforms and efficiencies while boosting the price of gasoline by about 9 cents a gallon and increasing the average motor vehicle registration fee by about $60 a year. If adopted, the legislation would raise an extra $541 million while eliminating the 19-cent-per-gallon retail tax on gasoline and the 15-cent-a-gallon retail tax on diesel -- achieving an overdue parity -- and applying to both fuels a new wholesale tax that would generate additional revenue as the price of fuel increases. The registration fee hike would add another $500-600 million to the road maintenance pot.

Another of the bills slated for introduction today would create a regional transit authority for southeast Michigan -- a plan that legislators will probably move first, according to state Rep. Rick Olson, R-Saline, a fiscal conservative who sponsored the gas tax bill.

"No one is disputing that we need $1.4 billion," Olson points out. "We'll either spend $1.4 billion now, or we'll spend a ton more later."

Replacing the per-gallon tax on gas and diesel with a percentage tax on the wholesale price of fuel may not be much more politically palatable than raising the per-gallon tax, but it provides a more reliable source of funding. Under the current tax scheme, road revenues shrink when soaring fuel prices depress demand.

"We shouldn't see stagnating revenue in the future,'' said Mike Nystrom of the Michigan Infrastructure and Transportation Association. "We should see some inflation increases over time. That's the beauty of these adjustments."

In the long run, any gas tax will yield diminishing revenues as drivers trade their current vehicles for increasingly fuel-efficient ones. So Michigan and other states eventually will need to find better ways to pay for roads, bridges and public transit.

But getting a new revenue stream in place -- a mileage-based odometer tax is one alternative under study -- would take five to seven years. And Michigan's transportation system desperately needs new revenue now.

Deteriorating roads will become more and more costly to fix, and preserving good roads is as important as fixing bad ones. Spending $1 to keep a road in good shape saves and estimated $7 in reconstruction costs later. More money for Michigan's transportation system will also boost Michigan's economy, creating thousands of good-paying jobs.

Michigan last raised its gas tax -- by 4 cents, to 19 cents a gallon -- in 1997. Meantime, construction material costs have soared. Some county road commissions already leave snow unplowed and grass uncut. Battered roads cost drivers, on average, an added $400 to $500 a year.

The plan now before the Legislature offers the best hope for restoring and rebuilding one of Michigan's greatest assets: its transportation system.

http://www.freep.com/article/20120126/OPINION01/201260429/Editorial-At-long-last-Michigan-lawmakers-confront-crumbling-roads?odyssey=mod|newswell|text|FRONTPAGE|p

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